There's no need to chuck away the old code if you stay on the JVM, remember. You can develop the new functionality in Scala, Groovy, Jython, Clojure, whatever you want. It's not about rewriting existing code, it's about getting a competitive advantage when writing new code.
Why? If they are producing value where they are in a legacy language, why retrain them? If they are really good programmers, they will retrain themselves out of curiosity.
Good old computer languages are like comic book characters. They keep getting declared dead, but someone keeps bringing them back!
Now, whether Java is a good language is debatable. More relevant to the company is if it's a good project. If it is a good project producing quality output and value, leave it alone! There's no sense in changing languages just because it's a "new" technology. (In quotes because a lot of that stuff was developed in the 60's, and 70's by Bell, Xerox, and IBM R&D anyhow.)